Kebab sales bypassing the tax office – tax evasion in kebab restaurants

As a kebab shop owner, you attract a multitude of satisfied customers to your establishment daily. You maintain your accounting properly and fulfill your tax obligations. But one day, the tax authorities show up at your door with an allegation of tax evasion, claiming that you did not accurately record your revenues. Shocked and unsettled, you wonder – What can I do? In the following article, you will find all the relevant information related to criminal law and tax law.

Tax evasion is an offense that can be penalized with heavy fines or even imprisonment. The first thing you should do, therefore, is to contact an attorney or a specialist lawyer for criminal and tax law.

You need an experienced legal representative who will protect your rights and defend you against unjustified (or justified) accusations. An attorney specializing in criminal and tax law can help you assess the evidence, develop a defense strategy, and negotiate with the authorities. As the operator of a food establishment, such as a kebab shop or restaurant, you should turn to experts in tax evasion cases within the gastronomy sector.

Open cash registers often raise suspicion of tax evasion in the gastronomy sector.

A common cause for suspicion of tax evasion in kebab shops is the cash register system. Kebab stands often use so-called open cash registers—also known as drawer cash registers. These are often simple cash registers or drawers connected to a scale or calculator. They are primarily used in small shops or food stands that handle many cash transactions and have high customer traffic, such as kebab shops.

“An open cash register refers to a summarizing, retrograde determination of daily receipts as well as manual individual recordings without the use of technical aids.” (BMF letter dated 19.06.2018)

Unlike electronic cash register systems, open cash registers are operated entirely manually and do not automatically record any data. This means they do not capture the details of each transaction, such as the time, amount, items, or payment method.

However, open cash registers must also comply with the principle of proper bookkeeping (§ 158 AO). Every transaction must be recorded immediately and individually. Revenue and expenses should generally be documented comprehensively and in as much detail as possible in daily reports and a cash book (see AEAO to § 146, No. 2.1.2 and 2.1.3.). Industry-specific considerations and aspects of reasonableness must also be taken into account (BMF letter dated 19.06.2018). The respective records must allow an expert third party to conduct a thorough review of their basis, content, development, execution, and relevance for the business within a reasonable period (BMF letter dated 19.06.2018).

The problem with open cash registers is that they often do not meet the high standards required by the tax authorities. The tax office mandates that all transactions be recorded individually and in a verifiable manner to ensure that sales are correctly reported and taxed. If a business uses an open cash register, the tax office may assume that sales are not properly reported or are manipulated.

Additionally, some electronic cash registers (point-of-sale systems) are sold and used with software that facilitates tax evasion in the hospitality industry. Such manipulation software can allow entries to be deleted retroactively, preventing them from being reported to the tax office, or manipulated receipts can be used to make adjustments in the booking system, altering recorded sales post-entry.

Manipulation is often straightforward: in some cases, a simple turn of the register key prevents subsequent sales from being saved. Other methods involve changing the number and/or value of recorded transactions, enabling cancellations or reducing total daily sales while adjusting individual sales figures (so-called zapper programs). A popular feature is the “training waiter,” a fictitious function within the register that excludes transactions from the daily summary, thus omitting relevant revenue.

In cases of open cash registers and manipulated electronic systems, the tax office may estimate sales (§ 162 AO), which often results in inflated figures and significant tax back payments.

The tax authorities also have the option of applying enforcement measures under § 328 AO or prosecuting the taxpayer under § 379 (1) sentence 1 no. 1 and no. 3 AO.

Moreover, violations of bookkeeping obligations can be prosecuted under § 283 StGB and § 283b StGB.

Consult a lawyer if accused of tax evasion!

If you are suspected of tax evasion in the gastronomy sector, such as being accused as a kebab shop operator of using an open cash register or alleged by the tax office to have used a manipulated cash system and failed to report revenues correctly, you need a competent and experienced lawyer specializing in criminal and tax law by your side.

Our law firm, Mügge, Dr. Pitschel & Partner | MPP Rechtsanwälte, highly specialized in tax and criminal law, possesses extensive expertise in the gastronomy industry.

For years, we have successfully represented owners of kebab shops and other snack businesses in the greater Göttingen area and cities such as Kassel, Hanover, Hildesheim, and Braunschweig. Due to our specialization, we also operate throughout Germany, representing clients in cities such as Berlin, Hamburg, Munich, Frankfurt, Cologne, Stuttgart, Dortmund, Leipzig, Dresden, or Düsseldorf.

Please do not hesitate to contact us. The law firm Mügge, Dr Pitschel & Partner | MPP Rechtsanwälte is your reliable and professional partner in all tax and criminal law matters.